Monday, June 25, 2007

View from the Flipper land

I was at an open house hosted by one of my flipper friends this past weekend in Edmonton. I spent quite a bit of time discussing her perspective on the housing market in Edmonton and in Alberta in general. It's the same story and arguments-strong immigration, strong inter provincial migration, upgrader projects, 'investor' interest, plethora of $15/hour jobs….Obviously, it's the same concept-every bubble needs a story and the story in Alberta is vivid and engaging.
I sat with her for more than four hours on Sunday afternoon in anticipation for some potential buyers. Not even one showed up. She says that her realtors are also reporting that they are getting no showings at all. It took her around 60 days to sell her previous property (via a realtor) and she says that's the normal time for selling houses these days. She mentioned that the general perception is that if there is a rate increase, the market is going to fall. If there is no rate increase, then things will probably pick up. Again, this is entirely her perspective and might reflect the views of flippers out there.
Meanwhile, inventory is increasing unabatedly, at least in comfree in Edmonton. There are close to 2100 listings. Last year this time, there were 1859 properties in MLS.
I think we'll end up with close to 10,000 properties for sale by the end of next month.

(sermonizing on)

Finally, a general comment about the chasm between 'us' (bears) and them (bulls) and the comments made about this here and on Bob's blog. Personally, none of this categorization matters to me. As I have mentioned before, I've several flipper friends. I don't have any problems with what they have chosen to do. They are probably unaware of the risks they are taking or have somewhat skewed understanding of risk/reward concept, but they are adults and are (hopefully no mortgage frauds!) doing everything within the legal framework of our country. We should be tolerant of that decision. Let flippers be flippers. Once the flippers are gone and the market begins to correct itself, there will be another species-the knife catchers-that will come into fray. Perhaps when everybody has got tired of real estate and would not want to see the current inventory level in Calgary, that would be the time for true long term real estate investors to come in. Will such a time ever come again? We'll see.

(sermonizing off)
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